Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 20 - Evidence - June 7, 2005
OTTAWA, Tuesday, June 7, 2005
The Standing Senate Committee on Transport and Communications, to which was referred Bill C-3, to amend the Canada Shipping Act, the Canada Shipping Act, 2001, the Canada National Marine Conservation Areas Act and the Oceans Act, met this day at 9:34 a.m. to give consideration to the bill.
Senator Joan Fraser (Chairman) in the chair.
[English]
The Chairman: Honourable senators, welcome to this meeting of the Standing Senate Committee on Transport and Communications. Today we are considering Bill C-3. Our witnesses this morning are Ms. Paquin, Mr. St-Julien and Mr. Schiller.
[Translation]
Welcome everyone. I imagine you have been informed about our procedures. You have approximately ten minutes to make your presentation, following which we will go to questions. Who would like to start? Go ahead, Ms. Paquin.
[English]
Ms. Suzanne Paquin, Vice-President, Nunavut Eastern Arctic Shipping Inc., and President, Transport Nanuk Inc.: Honourable senators, for the sake of time, I tabled my submission, and I ask for agreement that it be inserted into the records as if read. I will try to keep my remarks to less than 10 minutes.
On behalf of the partners of Nunavut Eastern Arctic Shipping, or NEAS, as we call it, thank you for this opportunity to participate in your study of Bill C-3. We do not oppose the administrative components of this omnibus bill. We appreciate that it is primarily administrative in nature, concerned with housekeeping on matters relating mainly to marine security. The bill seeks to realign regulatory and operational responsibilities between Transport Canada, Fisheries and Oceans, and the Canadian Coast Guard.
In this post-September 11 environment, the hard-working men and women at Transport Canada, Fisheries and Oceans and the Coast Guard deserve every tool available to carry out their important work in keeping Canadians safe, and that includes up-to-date legislative authorities.
We are here today to bring to your attention one small component of this bill, specifically matters contained in clause 16(2). Under these provisions, Bill C-3 leaves with the Minister of Fisheries and Oceans responsibility for policy matters relating to the setting and payment of fees for marine navigational services or marine fees. We maintain that this may be contrary to the stated intent of the bill to transfer all Canadian Coast Guard policy responsibilities relating to marine navigation services, among many other areas, to Transport Canada.
We hope to impress upon you the profound impact that this small clause has had and continues to have on Canada's North and the peoples, communities, agencies and businesses in the Nunavut territory and in Nunavik, the northern region of Quebec, that are dependent on resupply by way of the sealift.
Before we get into the substance of the bill, let me say a little about NEAS. NEAS is a majority Inuit-owned marine transportation and related services provider. Inuit majority partners include Makivik Corporation from Nunavik, and both Qikiqtaaluk Corporation and Sakku Investments from Nunavut. As Inuit birthright corporations, these organizations are mandated, on behalf of their respective peoples, to administer financial proceeds from land claims agreements for social, economic and employment opportunities. Rounding out NEAS is the managing partner, Transport Nanuk Inc., itself a joint venture between Logistec Corporation of Montreal and The North West Company of Winnipeg. We have been providing sealift services in the Arctic for over 50 years.
Under the relevant provisions, NEAS is recognized as both an Inuit business and a Nunavut business under the Nunavut land claims agreement and Government of Nunavut policies respectively.
With two vessels, NEAS exclusively services the Eastern Arctic. We carry all dry cargo from construction materials to cars and trucks to non-perishable goods. It is an operational challenge, to say the least, given the North's short shipping season, which is only five months from early July to early November.
We have led the way to modernize marine transportation services in the North, including the introduction of containerization and new handling techniques. In 2000, we purchased and imported the first Inuit-owned ice class 1 multipurpose container vessel in Canadian history, the MV Umiavut (`Our Ship'). NEAS also introduced an innovative Inuit marine training program facilitating the employment of local Inuit on our vessels.
In keeping with our mandate, our objective is to provide the most cost-effective services possible while contributing to sustainable Inuit-led economic development.
Government officials, including the Parliamentary Secretary to the Minister of Transport as well as the Commissioner of the Coast Guard, have been clear and consistent that the objective of Bill C-3 is to consolidate policy and regulatory responsibilities within the Department of Transport while leaving operational matters with the Canadian Coast Guard. Although the purpose of Bill C-3 may have been to make the Coast Guard policy-neutral, Bill C-3 does not achieve this.
We draw clause 16(2) to the attention of honourable senators. This clause leaves authority with the Minister of Fisheries and Oceans for regulations ``respecting the setting and payment of fees for services provided in the administration of (i) Part 5 (Navigational Services).'' We request that senators provide sober second thought to this provision, particularly given the experience of Canada's North with the marine fees policy as it has been traditionally administered by the Coast Guard.
As a cost recovery mechanism, user fees were introduced in 1996-97 for the provision of marine services by the Canadian Coast Guard. The implementation of the marine services fees policy was difficult for all, including the Coast Guard and industry alike. In Canada's North, however, it has been particularly difficult. Canada's North is unique under the marine fees policy. It is the only region that has an explicit exemption from the fees based on the recognition of socio-economic conditions. This exemption has yet to be implemented by the Coast Guard, particularly in the Eastern Arctic where the socio-economic reality at this time is total dependence on resupply by way of the south.
Recently, the Legislative Assembly of Nunavut went so far as to pass unanimously a motion calling on the federal government to finally implement the exemption for vessels servicing the Eastern Arctic and to retroactively reimburse all fees charged by the Coast Guard and paid to date. Further, the Arctic Marine Advisory Board, the body that represents all northern carriers, has also formally called upon the Coast Guard to finally implement the exemption for the North.
It is critical for senators to appreciate that to recognize the socio-economic conditions of the Eastern Arctic is to recognize dependence on resupply by way of the south. This is a fact of life at this time, given the lack of alternative transportation infrastructure.
Northern stakeholders are concerned that should policy authority remain with the Coast Guard for the setting and collecting of marine fees, as is proposed under Bill C-3, not only will the northern exemption not be implemented, but the North will lose the exemption altogether. If the intent of Bill C-3 is to separate operations from policy, it should do so for marine and navigation services as well.
We are seeking your committee's assistance in having the complex environment of the North recognized in Bill C-3. In the past, different approaches have been pursued by the Coast Guard in relation to fees in the North. Initially, they proposed a lower fee structure for vessels carrying multiple functions. However, that was later changed and fees went up. Under the current program, our two vessels are charged two separate rates despite the fact that they carry the same cargo to the same communities. One rate is approximately 10 times more than the other. The application makes no sense.
We recognize that it is extraordinary but we request that your committee amend Bill C-3 and remove from the Minister of Fisheries and Oceans the authority to set fees for navigational services, at least in relation to the provision of services in the North. Either transfer the authority to another agency or provide an explicit exemption for the North in the legislation.
If senators are not to amend Bill C-3, then we urge you in your report to the Senate on the bill to encourage the Minister of Fisheries and Oceans to direct the Coast Guard to recognize the socio-economic conditions of the North and exempt equally all communities North of 60, including the Eastern Arctic, from all marine fees. Otherwise we would encourage your committee to consider pursuing a full study and report on the marine fees issues, including consultations with all relevant industry stakeholders and representatives of the territorial governments.
Thank you for your time and consideration. Mr. St-Julien will now address your committee.
[Translation]
Mr. Guy St-Julien, Special Advisor on Government Relations to the President, Makivik Corporation, Nanuvut Eastern Arctic Shipping: Madam Chairman, Mr. Pita Aatami, President of Makivik Corporation, sends his regrets and wishes to convey the following message. Makivik Corporation made every possible effort to appear before the House of Commons committee examining Bill C-3. Mr. Aatami wrote the following in a letter dated December 9:
We believe your committee would do well to hear our point of view and our experiences in so far as Bill C-3 is concerned. The proposed legislation confers upon the Minister of Fisheries and Oceans unrestricted power with respect to the setting and remittance of navigation fees, which directly increases the cost of living of northern communities in Quebec.
Honourable senators, it is a known fact that the Inuit of Nunavik, Nunavut and the Territories pay taxes. The Inuit of Nunavik may in fact be the only people in Canada to pay two taxes, like any other resident of a southern community.
The Chairman: I want to thank our witnesses very much for their testimony.
[English]
Senator Tkachuk: We have not yet had the minister of the department come before us to explain all of the bill to us. However, I will do the best I can.
Could you give us some history of the exemption from user fees by the Coast Guard for the North? Under what legislative authority is this exemption granted? When was it supposed to take effect?
Ms. Paquin: In 1996-97, Coast Guard decided that it would charge marine service fees. It was a difficult time. We maintained that there was a provision in the policy that the North should be exempt from such fees. However, we worked co-operatively with Coast Guard in the hope that they would recognize the exemption and give it to us in time. That did not happen. Coast Guard reneged on their negotiation and on their solutions during what they called a marine service fees moratorium period. We always maintained that the North should be exempt from those fees, but that did not happen. Nevertheless, we are eager to work with Coast Guard again to resolve this issue, which has existed since the beginning of the policy.
Senator Tkachuk: In other words, the exemption was never granted; it was only discussed or negotiated with the Coast Guard. Who else would have been part of those discussions? Would the Nunavut territorial government, or yourself as a corporation?
Ms. Paquin: I refer you to the backgrounder, which is included in your documents. It is very specific. It states:
Fees will not apply for the provision of services North of 60, including the waters of Hudson, James and Ungava Bays, Lake Athabasca and other remote parts at this time. The exemption is based on the socio-economic conditions of the North.
We work co-operatively with Coast Guard.
Senator Tkachuk: There was an exemption granted, then.
Ms. Paquin: It is in the policy.
Senator Tkachuk: What is holding up legal action? How do they collect the money? Do they collect the money in advance of doing ice breaking? How are the fees charged and collected? Where do they go?
Ms. Paquin: The fees are charged by Coast Guard. I suppose they go to Coast Guard. They send out a bill for marine service fees, and we pay it.
The Western Arctic is exempt from the fees, because the services are done in a different manner there. They do not pay marine fees in the west. The service is provided at a higher level at Hay River in the Northwest Territories. In the east, because the service is provided from the south, which has always been the case, fees are charged.
Senator Tkachuk: Why would there be a difference in public policy if the Department of Fisheries were doing it as opposed to the Coast Guard or the Department of Transport?
Ms. Paquin: It is important to separate the policy from the operations. Leaving the policy direction with the Coast Guard gives them a licence to print money. We have to change the bill or report back that the minister should do something about the situation. To recognize the socio-economic conditions of the Eastern Arctic is to recognize the reality of resupply by way of the south.
Senator Tkachuk: I understand that. However, if it is government policy to grant the North, and particularly the Eastern Arctic, an exemption from user fees, what difference does it make if the fees are collected by the Department of Fisheries and Oceans, by the Coast Guard or by the Department of Transport? Or do you want the provision removed entirely?
Ms. Paquin: We simply want the exemption to be applied. It is written in the policy. We believe that it is very simple. The minister can deal with this without changing the current policy or the fee schedule. We just want the exemption applied.
Senator Tkachuk: Would it require a regulation to change it, or an amendment to the bill?
Ms. Paquin: An information sheet is all that would be required, because it is already recognized in the policy. We simply want the policy to be applied in the way it was intended.
Senator Tkachuk: Did the Department of Transport not do this work before it was moved to the Department of Fisheries and Oceans? Now this bill is moving it back to the Department of Transport; is that correct?
Ms. Paquin: This was always with the Coast Guard.
Senator Adams: Thank you for coming. I have always been interested in airline and shipping transportation in the Arctic.
Mr. Curley is the member of the Legislation Assembly of Nunavut from Rankin Inlet. He made a motion in the assembly about a month ago dealing with his concerns about marine fees.
This issue is very important for the North because of the high cost of shipping goods, including construction materials, to the North. We found out just over a month ago that the fees have been charged since 1990.
The Coast Guard has great difficulty getting into some of the communities because not all of their ships are icebreakers. They started going to Pelly Bay in the last five or six years. Pelly Bay was built by the airline in the Arctic, with the community housing and everything that flowed to the community. I do not know how much it has cost to build that community since its beginning in 1970 or perhaps in the 1960s.
My concern is the high rate that is being charged for shipping to the community. The fee charged by the Coast Guard is an additional cost for bringing goods to the North, is it not?
Ms. Paquin: It is an added cost, and any added cost for transportation in the North is too much.
Senator Adams: You said that these fees are not charged in the west, such as at Hay River. Is that because there is a railway to Hay River? Do you know what the difference is in the cost per ton between shipping and barging?
Ms. Paquin: I do not have that information.
Senator Adams: As Senator Tkachuk said, if this bill is passed, the fees will be transferred to Transport Canada. Transport Canada does not have any control over this at this time. It used to be that Transport Canada was responsible for harbours, but now the Coast Guard has responsibility for that. I believe that the Coast Guard used to be responsible only outside of the harbours. Am I correct?
Ms. Paquin: Yes, that is correct.
Senator Adams: What percentage does the Coast Guard currently charge shippers for navigation fees?
Ms. Paquin: They charge 0.4 per cent of the cost.
Senator Adams: Am I correct that you are mostly concerned about the shipment of goods from Montreal?
Ms. Paquin: Yes. Currently, all of the Eastern Arctic is serviced out of the Montreal region, and they are being charged marine service fees although there is a specific provision exempting the North from marine fees, for socio- economic reasons.
Senator Adams: It used to be that shipping was charged f.o.b. to the beach. Are goods delivered right to the site now for that fee?
Ms. Paquin: That depends on the contract that we sign with our customers. Some customers take it to the beach and some take it to the store or specific location in the community. We provide whatever service the customer wants.
Senator Adams: When I was younger, the Hudson's Bay Company delivered goods, and the people used to carry them up to the store. Today the ships have their own equipment to do the unloading.
Ms. Paquin: We discharge. If there is a local carrier that can carry the cargo from the destination to wherever, often we will allow the cartage company in the community to do that.
[Translation]
Senator Nolin: I wonder if you might clarify three points for me, Ms. Paquin. You responded to Senator Tkachuk's question about an exemption. I understand that this is strictly a departmental or Canadian Coast Guard policy, not something set out in an act or in regulations. It is purely a matter of public policy. Is that correct?
Ms. Paquin: This policy is inscribed in the legislation respecting marine services fees.
Senator Nolin: I understand. This document reflects public policy. It is not legislation. In other words, Parliament never authorized this exemption. It was strictly the Minister's or Cabinet's decision to grant an exemption north of the 60th parallel and in the waters of Hudson's Bay, Ungava Bay and Lake Athabasca. Correct?
Ms. Paquin: Yes, this is the policy, but it has never been applied.
Senator Nolin: I understand, but it makes all the difference in the world to us. A law is one thing, a regulation another and public policy, still quite another. I have listed these in the order in which they are the hardest to amend. Amending legislation is our bailiwick. It is somewhat easier to amend regulations, because the government is involved in the process. A minister can amend a policy and the next day, amend it again, and so on, and so forth. We do not have much say in the matter.
If I understand correctly, you are asking us to introduce public policy into the Act. Is that right?
Ms. Paquin: To apply public policy.
Senator Nolin: I understand, but putting that aside for a moment, you are asking us to take this policy and to provide for an exemption in the act. Am I right?
[English]
Mr. Francis Schiller, Government Affairs Advisor, Nunavut Eastern Arctic Shipping Inc.: The intent of Bill C-3 is to separate policy content from operational functions, vesting with Transport Canada the responsibilities for regulation and policy direction and leaving with Coast Guard only the responsibility for operations.
Senator Nolin: You mean the responsibility to do the work?
Mr. Schiller: Right. We say that if that is the intent of the overall bill it should apply to all provisions, including marine navigation services fees. In Bill C-3 the only policy functions that remain with the Coast Guard are in the area of marine navigation services fees. Ms. Paquin and NEAS have claimed here that perhaps the North can serve as an example of why it may be appropriate to bring the marine navigation services fees in line with the bill's intent, which is to separate those functions. The idea is to provide a check and balance. If an agency is to become dependent on cost recovery revenues, there must be a check and balance in the agency's process of determining who has to pay those revenues. The then commissioner said it best when he was before the House of Commons standing committee; he said that Special Operating Agencies or SOAs are traditionally policy-neutral. In other words, SOAs traditionally do not give policy advice to ministers.
Coast Guard policy and regulations were purified in order to create it as an SOA. That is the relation between what was removed and what stayed. We agreed perfectly with the commissioner's assessment before the standing committee that the Coast Guard should be purified of policy responsibilities, including the area of marine fees. We think that the North is an example of how, without a check or balance, they can become dependent on or addicted to revenues from areas that should be exempt.
[Translation]
Senator Nolin: I understand what you are telling me. Perhaps you can further enlighten me, Ms. Paquin. In your testimony, you alluded to two different fee-setting structures for two vessels with the same mission. Could you explain your comment to me further?
Ms. Paquin: Yes. In your package, you will find some tables showing two vessels. One is the MV Aivik, classified as a RoRo, or Roll-on/Roll-off, vessel. According to the Canadian Coast Guard definition, this vessel is considered to be a container ship. The second vessel, the MV Umiavut, is not classified as a RoRo, or as a container ship, even though it has a container plan. The fee charged to the vessel is based on gross tonnage, or GRT. With two different fee structures, we get these results.
Senator Nolin: The fees double.
Ms. Paquin: It makes an incredible difference.
Senator Nolin: I am not sure that I understand. I see here that the fee charged to each vessel is based on the ship's functionality.
Ms. Paquin: That is correct. The Canadian Coast Guard categorizes each vessel and sets the fee based on how the ship is categorized.
Senator Nolin: I understand.
Ms. Paquin: Lucky for you, because I do not understand how the process works.
Senator Nolin: Clause 16(2) of Bill C-3 — the clause of greatest concern to you — calls for an amendment to section 35(3) of the former act. Did the previous version of the legislation contain a paragraph (d), the current focus of your concern?
Mr. Schiller: I believe so.
Senator Nolin: In other words, this provision in Bill C-3 is nothing new? It is merely a former provision transposed to this bill?
[English]
Mr. Schiller: In this section they separate the differing responsibilities between the Minister of Fisheries and Oceans and the Minister of Transport, vesting with the Minister of Transport the new authorities for regulation and policy.
Senator Nolin: Except for that.
Mr. Schiller: Exactly.
Senator Nolin: In the old act, subsection (d) was part of section 35(3). Clause 16(2) of the bill seeks to amend the old 35(3).
Mr. Schiller: That is correct.
Senator Nolin: Under which responsibility, the Minister of Fisheries and Oceans?
Mr. Schiller: That is correct.
Senator Nolin: You are saying that all of the policy questions are now under the Minister of Transport. Regulation authority should also follow.
Mr. Schiller: Potentially, yes, senator, consistent with the intention of the bill.
Senator Nolin: You are not asking us to include an exemption in the bill?
Mr. Schiller: Not necessarily.
Senator Nolin: If it is a matter of policy, the Minister of Transport should determine that.
Mr. Schiller: Within the bill's own inherent purpose.
Senator Munson: What rationale is given for one rate's being 10 times more than the other rate? Can you explain in layperson's terms why that rate is charged? Has anybody explained that to you?
Ms. Paquin: We have been advised that the Umiavut is considered a general cargo vessel; because of that, she is not eligible for the container rate. The MV Aivik is a ro-ro vessel or roll-on/roll-off vessel; therefore, she is considered a container vessel and she falls within the container rate. That is what they say.
Senator Nolin: It is cheaper for containers.
Ms. Paquin: It is the way they are defined.
Senator Munson: When you use the word ``they'', to whom are you referring?
Ms. Paquin: I am referring to the Coast Guard.
Senator Munson: People always talk about theys. Are these bureaucrats who sit back and say, ``Let us make up some rules for container ships?''
Ms. Paquin: Originally they had considered both of our vessels under the container rate schedule. Subsequently that definition was modified and then it excluded our vessel. To our knowledge, ours was the only vessel excluded.
Senator Munson: How detrimental are these fees to your business?
Ms. Paquin: Any additional fee in the North is detrimental. The cost of living is very high. Any extra cost is detrimental to the North.
Senator Munson: What does paying these user fees cost your company each year? Can you give me a dollar figure? Your company obviously wants to make some money.
Ms. Paquin: Our shareholders are the Inuit Development Corporation, so our monies go right back up north. That is the first thing. The marine services fees cost our company alone over $25,000 a year, and we are not the only company servicing the North that is charged these fees.
Senator Munson: Where does that money go? Is it simply thrown back into the national treasury?
Ms. Paquin: We do not know what the Coast Guard does with that money. Is that the question?
Senator Munson: That is the question. That is good for me. I wanted to get an idea of how this business works. It is brand new to me. As you say, the more money that flows back into the economic growth of the North, the better. That is a good thing.
Ms. Paquin: Yes. We need to minimize the cost. Additional costs are detrimental to the North, definitely.
[Translation]
Senator Chaput: My question follows along the same lines as those of Senator Nolin. Perhaps you have already answered the question, but I want to be certain that I understand your position clearly.
There are two key points to consider. On the one hand, there is the matter of service fees and how these are set. On the other hand, there is the matter of who is authorized to set and order remittance of these fees. Pursuant to Bill C-3, the authority would remain with DFO.
Are you primarily concerned about service fees and how these are set and whether or not they should be eliminated? If that is the case, then this is policy issue, unless I am mistaken. The bill could stand as is and the whole matter of service fees could be addressed. Would you not agree?
[English]
Mr. Schiller: They are separate, but they are interconnected; if the bill's intent is carried through, if the policy authority remains with Fisheries and Oceans, then the question is whether there is a check on that authority. Given the experience in the application of the policy in the North, we bring that question to the attention of honourable senators in the hopes that you will consider amending the bill in order to create a check on the authority and separate the operations from the policy.
[Translation]
Senator Chaput: What difference would it make if this authority was taken away from DFO and transferred to Transport Canada?
[English]
Mr. Schiller: Transport Canada was not dependent on generating the revenues. They will perhaps be more objective or policy-neutral.
[Translation]
Ms. Paquin: Our concern is that fees would increase or that ice-breaking fees would be charged in the Arctic.
Senator Chaput: So then, the decision does not rest with you, but with someone else.
Ms. Paquin: That is correct.
[English]
Senator Phalen: My question is in the same area. My understanding is that there is a user fee act; is that correct?
Mr. Schiller: I am not sure, senator.
Senator Phalen: My understanding is that there is a user fee act and that the act determines the fees, not Fisheries and Oceans nor Transport Canada. You are asking that the authority to set fees be removed from the Minister of Fisheries and Oceans. I do not think the minister sets the fees. I think there is an act that covers that. I stand to be corrected, however.
The Chairman: I believe there was a private member's bill about user fees; I do not think it went through. I do not know whether it died, but I do not think it has become law yet. I am not sure that there is overarching legislation now about user fees. Does anyone have a longer institutional memory than mine?
Senator Nolin: On the question of fees, I know that the Standing Joint Committee for the Scrutiny of Regulations is studying the area of fees and how those fees are calculated and what are the authorities of different ministries to establish those fees. I am not aware of any omnibus law saying that, but I stand to be corrected.
Senator Tkachuk: We could ask the minister tomorrow.
The Chairman: I remember a number of budget speeches where people said that user fees would be charged. Whether that was translated into an actual bill, I do not know. Senator Phalen has sent us down a wonderful alley.
Senator Phalen: Good.
To follow up on what Senator Adams said earlier, I do not know whether the question was answered because I do not know where Hay River is. Is there a different fee structure for the Western Arctic than for the Eastern Arctic?
Ms. Paquin: Yes, there is a difference. It is my understanding that in the west they do not pay marine services fees; in the east, they do. That is because of the way the service is provided. In the east the service is provided by way of the south. In the west the service is provided in such a fashion that cargos are railroaded up to Hay River, which is in the Northwest Territories, and subsequently carried to the different communities in the Western Arctic.
Senator Phalen: Is the fee structure the same in the rest of the country?
Ms. Paquin: I do not believe it is.
Senator Phalen: My understanding is that Transport Nanuk has a ship. You contend that your ship should have been considered a container ship and not a cargo ship; did you have any luck in that?
Ms. Paquin: We believe that we should be exempt from paying any fees at all, because the North, for socio-economic reasons that exist in the policy, should have been exempt from the beginning.
Senator Phalen: You did not have any luck in your contention that your ship should have been a container ship and not a cargo ship; is that correct?
Ms. Paquin: We worked co-operatively with Coast Guard down that avenue. Originally the vessels were considered container vessels. We had always maintained that the North should have been exempt. We had always been promised that this item would be examined. We worked co-operatively for a long time, always maintaining that the North should have been exempt. We were advised that exemption for the North would be considered in future consultations, but that never happened. We were actually sent backward.
The Chairman: The fees amount to charges of about $25,000 per year.
[Translation]
What percentage of your revenues are accounted for in this $25,000 figure?
Ms. Paquin: About 0.4 per cent.
The Chairman: I would imagine that the company has earnings. What percentage of your revenues does this $25,000 represent?
Ms. Paquin: We are a private sector company and as such, we do not disclose our earnings. We charge 0.4 per cent of our revenues, which works out about even.
The Chairman: We are not trying to stick our noses in your business affairs. We simply want to understand the extent of the burden in this case.
Ms. Paquin: I understand.
[English]
The Chairman: We are told that this bill translates into legislative terms administrative changes that have already been made legally under the authority of the Governor in Council. We are told that the bill does nothing else. You have confirmed that this clause already existed. It seems that to amend the bill in the way that you propose would be to change the nature of the bill and, therefore, remove it from the realm of administrative tidying up. It would no longer be a purely administrative framework bill but would become a policy-making bill. The entire nature of the bill would change. Is that correct?
Ms. Paquin: Perhaps Mr. Schiller could speak to that.
Mr. Schiller: I am not sure if the overall intent of the bill is to separate policy from operations. If that is the intent, then we could highlight, for the benefit of senators, the one provision they might have missed in respect of the setting of policies on fees to be charged and collected. We understood that to be the intent of the bill. As well, a number of housekeeping-related matters on security are important provisions. We note for the benefit of committee members that the policy capacity relating to marine fees rests with the Ministry of Fisheries and Oceans. That would seem, at face value, to be inconsistent with the overall intent of the bill as presented.
The Chairman: Returning to the issue of money, I am confused by the total amount being recovered through fees at large as outlined in the backgrounder. You said that you are only one company that is shipping in this region.
Ms. Paquin: That is correct.
The Chairman: I understand that $99.8 million has been allocated to commercial shipping, of which only a small portion would be applied to the Eastern Arctic. Do you know what that figure is?
Ms. Paquin: We do not know.
Senator Tkachuk: For the record, Mr. Schiller is not a government employee but a member of a lobbying firm.
Mr. Schiller: That is correct.
Senator Tkachuk: Could you state for the record the name of the lobby firm and the names of the principals?
Mr. Schiller: I am a principal at the Industry Government Relations Group. There are three other principals, Mr. Gary LeRoux, Mr. Duncan Hills and Mr. Kirk Cox.
Senator Tkachuk: Who are the president and vice-president? Is it a partnership?
Mr. Schiller: We operate as equals. We do not have formal titles, such as president, although for theses purposes, I am the president.
Senator Tkachuk: Do you have any other clients in the territories outside of this particular group?
Mr. Schiller: I have been fortunate to work for Nunavut Eastern Arctic Shipping for a number of years. I also work for the North West Company.
Senator Tkachuk: What is the North West Company?
Mr. Schiller: The North West Company is an operator of approximately 150 stores across Canada. They are the largest employer of Aboriginal peoples outside of the federal government. They are also the largest private sector employer in Nunavut, as well as the largest employer of Inuit in Nunavut.
Senator Tkachuk: They would receive goods shipped by Nunavut Eastern Arctic Shipping.
Ms. Paquin: That is correct.
Senator Tkachuk: It would be to their benefit as well.
Ms. Paquin: Yes, it would.
Senator Tkachuk: We are clear on a number of issues. The Coast Guard used to fall under Transport Canada, then Fisheries and Oceans, and now it is a stand-alone agency. Is it completely separate from the Department of Fisheries and Oceans or does it fall under the Minister of Fisheries and Oceans, although it is an agency?
Mr. Schiller: I believe it still reports to Parliament through the Minister of Fisheries and Oceans.
Senator Tkachuk: I am certainly amenable to an amendment to change the charging of the fees to the Minister of Transport, as the rest of the bill seems to do, rather than leave it with the Minister of Fisheries and Oceans, which seems at odds with the intent in the bill. That sums up my view and I want to confirm your thoughts on this so that you are properly represented when the minister appears tomorrow.
Ms. Paquin: That is correct.
The Chairman: Now I am confused. I have a supplementary question. Your core objective is to eliminate the fees. Is that correct?
Ms. Paquin: Our objective is to eliminate the user fees for the North.
The Chairman: You believe that it would be a more fruitful avenue to have the responsibility lie with the Minister of Transport rather than with the Minister of Fisheries and Oceans. Is that correct?
Ms. Paquin: That is correct.
Senator Adams: Oil tankers frequently ply the waters of the North. Are they charged such fees?
Ms. Paquin: All of the ships navigating the Eastern Arctic are charged fees.
Senator Adams: At one time, the Coast Guard was operated by Transport Canada to deliver oil to the community. Now, most of the tankers have been privatized. Does the Coast Guard operate any oil tankers?
Ms. Paquin: In certain communities, like Pelly Bay, or Kugaaruk, oil is carried by the Coast Guard via transshipment from Nanisivik. In most other communities, commercial tankers deliver the oil.
Senator Adams: Is the Coast Guard a competitor for fees? We have a job at Pelly Bay, for instance. Usually some of the cargo ships go up to Nanisivik. Does your ship take cargo as far as Nanisivik?
Ms. Paquin: Yes, Nanisivik is used as a transshipment point for Kugaluk as well as Eureka. The Coast Guard picks up the cargo in Nanisivik and carries it for furtherance to those two destinations.
Senator Adams: Do you have anything to do with oil tankers or their cargo?
Ms. Paquin: We carry only dry cargo. We do not do oil, unless it is in drums.
[Translation]
Senator Nolin: I have another question.
[English]
In your remarks, you said, ``We maintain that this may, in fact, be contrary to the stated intent of the bill...'' What do you have in writing to tell us that the minister said that, and that it is the stated intent of the government?
Mr. Schiller: I would refer the senator to the two quotations we provided in the presentation. The first is the comments made by the Parliamentary Secretary to the Minister of Transport in the House of Commons: ``Specifically, all Canadian Coast Guard policy responsibilities and certain operational responsibilities... were transferred to Transport Canada.'' That is from Hansard, Friday, October 15, 2004. The second quotation is the comments from the then commissioner of the Coast Guard, delivered before the Standing Committee on Transport on November 30.
Again, we deferred to the legislative experts. We are just going on what we have been able to deduce from the comments made by government officials speaking to the bill.
Senator Tkachuk: Mr. Schiller, in your letter to us you said that the Government of Nunavut wrote in, as did a number of other leading Inuit groups including Nunavut Tunngavik Incorporated, to outline its views to the House of Commons committee. Is that not correct? You unsuccessfully requested to appear. Did they turn you down?
Ms. Paquin: Yes, they did.
Senator Tkachuk: Mr. Schiller seems to have some doubts. Did they turn you down? Did they turn down the Nunavut territorial government as well?
Mr. Schiller: My understanding is that the committee decided not to hear witnesses. A number of letters were received by the committee, including one from the Government of Nunavut. The Government of Nunavut cancelled at the last minute. My understanding is that the committee decided not to hear any other witnesses.
Senator Tkachuk: The government was given time, and then they cancelled out. Can you explain that again?
Mr. Schiller: I am not sure what transpired. I believe that the Government of Nunavut requested to appear before the standing committee, as did Transport Nanuk, Nunavut Tunngavik Incorporated and others. The committee made time available for the Government of Nunavut, who cancelled the meeting proposed, and the committee decided to proceed without hearing from other witnesses. That is my understanding.
Senator Tkachuk: Did you receive any correspondence from the chairman of the committee addressed to you, Mr. Schiller, or to the corporation regarding the reasons why, or were they just too darn busy?
Ms. Paquin: I guess they were too busy.
Senator Adams: I would like to find out more. Why would the House of Commons not hear from the witnesses? As a background, at one time there was at Igloolik a transportation committee. How long ago was the agreement with the partnership with the shipping set up? Was it about two or three years ago?
Ms. Paquin: We were set up in 1998.
Senator Adams: I want to make sure our committee understands Nunavut and Nunavik. Nunavut is a territory and Nunavik is in Northern Quebec.
Right now, in partnership with the transportation committee, you own two ships. Is that correct?
Ms. Paquin: We own two ships; that is correct.
Senator Adams: What is the cargo tonnage?
Ms. Paquin: The Umiavut carries about 14,000 cubic metres of cargo, and the Aivik carries about 12,000 cubic metres of cargo. They each do three voyages up in the Eastern Arctic, to all of the Eastern Arctic, including all the 14 communities in Nunavik, Baffin Island, Kivalik and elsewhere.
Senator Adams: Since Churchill Northern Transportation Company Limited (NTCL) has been closed down, do you now have more of the business in the Keewatin region around Hudson Bay?
Ms. Paquin: The Kivalik region is not the region we service for the Government of Nunavut. We service the Baffin Island region and the Nunavik region, although we do call Rankin Inlet, Coral Harbour and Repulse Bay as well. We are not the GN carrier for the Kivalik region at this time.
Senator Adams: Do you know exactly what the Coast Guard says in regard to tonnage, because you have no icebreaker facility to go up to Pelly Bay? Does the Coast Guard go up to Grise Fjord?
Ms. Paquin: We go to Grise Fjord.
Senator Adams: That is the last community right at the top of the high Arctic.
Ms. Paquin: It is very difficult.
The Chairman: For senators who are unclear about Nunavut and Nunavik, the last page of this folder has a very useful map. Grise Fjord is there as well.
Senator Adams: The ministry does not want an amendment. The committee would have had a chance in the House of Commons before the bill hit the Senate. We have a case here in the Senate. They wrote a letter to the committee in the House of Commons, and they were refused.
Senator Tkachuk: Mr. St-Julien, did you wish to make a comment?
[Translation]
Mr. St-Julien: Further to Senator Tkachuk's question, the President of Makivik, Mr. Pita Aatami, made every possible effort to intervene in this matter as a witness, but his efforts were unsuccessful. Quebec is one of only a few provinces in Canada where north of the 60th parallel, you will find the territory of Nunavik and seven northern villages. Mr. Aatami of Makivik tried to see to it that this policy was explained to the Inuit of Nunavik but his efforts were rebuffed.
[English]
The Chairman: I was going to say was that while I think it is appropriate for a Senate committee to examine what a Commons committee did, we may be getting into uncharted realms if we are examining psychological reasons.
Senator Munson: Just for the record, who is the chair of that committee?
The Chairman: Mr. Gallaway is the chairman of that committee.
Ms. Paquin: We did meet Mr. Karygiannis subsequent to the committee meeting, and we did inform him of our concerns with the bill.
The Chairman: Thank you all.
[Translation]
As you can see, it has been a learning process for us. Thank you.
Ms. Paquin: Thank you very much as well.
[English]
Honourable senators, we will take a two-minute break and resume for a brief in camera meeting to discuss another topic not connected to this bill. I take the opportunity to thank again our witnesses.
[Translation]
If we need more information, we can always contact you.
The meetings is adjourned.